Business Network Theory and the Role of Country of Origin

Business networks are recognised as the new organisational form of doing business, where cooperation and competition take place simultaneously, where the interdependencies between firms co-evolve through complementarity of skills, assets and capabilities, and inter-firm relationships thrive in the form of long-term repetitive exchanges and alliance membership. The theoretical and empirical literature is very rich in assertions about the benefits from networking and the positive impact of alliances and cooperation on firm performance, on supply chain integration, on dissemination of innovation and on learning and development of individual firms. Business Network Theory represents an eclectic body of theorising that focus at three distinctive levels – the level of actors’ attributes, the level of dyadic and multilateral inter-firm relationships, and the level of overall configurations of multinational business networks, or multinational business operations trespassing firms’ boundaries and countries’ borders.

Traditional concepts of International business theory, such as ‘country of origin’ could hardly explain the complexity of resource flows that take place on a global scale. While research on Asian multinational firms demonstrates clear evidence of distinctive patterns of governance and investment strategies, ‘country-of-operations’ has become a more dominant concept that can explain global collaborative strategies.  

The paper presents a new argument that global supply chains and commodity chains, or multinational business networks in a number of industries exhibit a common characteristic, where the regulatory environment in countries-of-operation induces similar strategic behaviour.